The Portland daily press. [volume] (Portland, Me.) 1862-1921, 1887-12-08

SURPLUS REVENUE.
Taxation and currency reform were the
questions which my distinguished predecess-
or deemed to be of most pressing importance,
and to them he devoted large part of the
two annual reports which he made to the
Congress. In those reports he stated his
honest convictions with vigor and boldness
which, together with the ability and fairness
that he showed in the general management
Of this Department, have given him a high
place among statesmen and finaneiers.
find the same subjects to be still the most inn
portant Of all those to which 1t Is my duty to
call your attention, and 1t Is not necessary to
DO otherwise than follow the general lines
stances have heightened the immediate ur-
gency of taxation reform as affecting the sur
plus revenues Of the Government. The ur-
gency is so great that the question
Of surplus revenues demands the earnest at
tentiUn OF both legislative and executive
branches Of the Government. By surplus
revenue Is meant the money which annually
remains in the Treasury Of the United States
after the officers of this Department have
collected the taxes laid on the people by the
laws Of Congress and have paid ali the ex-
penses and obligations OF the Government ex-
cept principal of the Understanding debt
Each year for twenty-five years there has
been such a surplus-the least, 81, ,344, $500.
In 1874: the greatest, Sl45, ,543 S10.7l, in 1882.
The total OF this surplus for the twenty-five
years ending June 80, 1887, was 8, ,49l, ,S45,-
953.12. 1t was S103, All ,097.69 during the last
fiscal year, which was only about million Of
dollars less than the greatest annual surplus
(that Of 1Ss4) since the reduction Of taxation
in 1888, although the ordinary expenditures
exclusive Of interest on the public debt,
were $50, ,642, 1857 greater In 1887 than 1884.
During the present fiscal year ending June
80, 1888, the surplus taxation will amount to
S113,000,000.
What shall be done with this surplus rev.
n fnfo fhn an.
form Of gold coin. silver coin, gold certif-
Gates, silver certificates, and United States
notes. The Government provides, at large
annual cost, mints and Bureau Of Engrav-
ing and Printing to coin and print these vari-
GUS forms of money and representatives of
money, that there may be a sufficient circu-
lating medium in the hands of our people to
enable them to conveniently exchange the
products of their labor among themselves
and with the peoples of the world. III we
take INTO the Treasury large amounts of
these circulating media In excess Of what we
pay ut,there will soon not be money enough
in the hands of the people for the purposes
of business; serious arrangement and disas-
ter must follow. and portion Of labor must
cease until the very evils which this wrong
Condition creates shall have worked a tempo.
rary cure by. so diminishing the consumption
of food clothing, fuel, and luxuries, by the
taxation of which the revenues Of the Gov
ernment are raised, that taxes do not exceed
the expenditures of Government. TSis evil
and this cure one wishes to avoid. There
are various expedients by which this may be
done.
1st The purchase of the interest-bearing
debt of the Government.
I'd. Larger expenditures by Government
for other purposes than the purchase Of
bonds, so that they shall each year equal the
taxation of that year.
3d. Reduction Of the revenue from taxa
tion to the amount actually required TO meet
necessary expenses.
All Of these expedents have in common
the one merit OF preventing the derange-
meat to business which must follow boarding
or locking up in the Treasury the circulating
media Of the people.
Purchase Of Bonds.
The first, the purchase of bonds, has the fur
ther merit that the interest ceases upon all
bonds purchased by the Government, but, on
the other hand, the use in business of the mon
ey which Is devoted to the purchase of bonds
Is worth something to the people from whom
it Is taken by taxation, and If the value of
this use Of money in business is greater than
the amount Of money which is saved by the
cancellation Of the Government bonds. then
the people have lost by the transaction, the
measure of loss being the difference between
the worth OF the use of the money TO them
and the interest saved on the bonds cancel
led for example. no calculation being made
of compund interest, the purchase at par of a
81 600 per cent. bond twenty years before
II IS due saves to the people $500 in interest
upon that bond but If the money had not
been taken from the people, and If in their
business 1t would have been worth 5 per cent
annually for the twenty years, then the total
value of the use of the $1,000 to them would
have been 81, 900, and there would have been
a loss Of $500 In consequence Of this surplus
Of taxation; but 4 per cent. bonds cannot be
be bought at par. and hence the circulation
must always be made upon the basis of far
less saving in interest than 4 per cent. pc
annum by the purchase OF the bond, while
the average annual value Of money TO the
whole people may safely be put at not less
than per cent.
The Government has purchased some
bonds during the present fiscal year for the
sinking fund and has been Obliged 10 pay
such price for them that the annual saving
In interest upon the purchases Is only about
two and one-half per centum. The price OF
the same classes Of bonds has advanced since
those purchases, so that thelannual saving in
interest would be less IL purchases were
made now. Should the Government attempt
TO spend all of its present surplus revenues
in the purchase of bonds, the price would I'd
much higher. Indeed 1t is doubtful IL enough
bonds could be bought to expend all the sur
plus revenues at price which would result
In any considerable saving in interest 10 the
Government. So that il does not seem wise
TO continue taxation beyond the ordinary
needs OF Government and then resort TO the
buying Of bonds for the mere purpose Of re.
distributing the circulating media among the
people. am not, however, at present dis
posed to recommend the appeal Of the sink
ing fund requirements OF the present laws.
1t is.probable that the command of these